Tuesday, October 8, 2019
Is Your Retirement Fund Ruining Our Economy?
In the mid-2000s, Michael Burry smelled trouble in the housing market, realizing that big banks were packaging shady subprime mortgages and reselling them as surefire investments. He concluded that it would lead to a spectacular collapse, made a huge bet against the market and, ultimately, tons of money. His story was dramatized in the book The Big Short by Michael Lewis and in a Hollywood movie in which he was played by Christian Bale.
Burry recently told Bloomberg that he sees another massive bubble happening. This time, he says, it's in index funds. Instead of relying on financial experts to actively pick winners and losers, index funds buy everything in a market, passively going up and down as the entire market goes up and down. If you're saving for retirement, there's a good chance you're invested in at least one of them.
In 1995, index funds represented only 4% of the total assets invested in equity mutual funds. By 2015, that had jumped to 34%. There is now over $4 trillion in passive funds indexed to the U.S. stock market, more than the market cap of Microsoft, Apple, Amazon, and Google combined.
Index funds make a persuasive offer. Don't pursue the expensive and risky strategy of buying and selling individual stocks. Don't pay brokers or mutual funds big fees to move money around for you. Instead, just park your money in these passive moneymakers, which offer lower fees, diversified risk, and — as the data has made clear — better returns over the long run.
It sounds almost too good to be true, and Burry is arguing it is. And he's not alone in expressing concerns about the astonishing rise of index funds.
The Price Isn't Right
Actively buying and selling stocks and bonds provides a service to the market: It's called "price discovery." If something is overvalued, traders sell it. If it's undervalued, they buy it. That moves the price of the asset — and it is the crucial mechanism to make sure the price is right, signaling its true value.
But index funds don't really discover prices. Investors just dump money into these investments, which mindlessly hold stock in companies whether they're doing well or not. Burry believes the fall of active buying and selling has led to overvaluations, and he's predicting a crash in the value of the large companies held in index funds. "I just don't know what the timeline will be. Like most bubbles, the longer it goes on, the worse the crash will be," he told Bloomberg. He's now investing in small companies, which he says are often ignored by index funds.
Burry has not disclosed much about his data or methodology. And like any trader, he could be wrong. But, even if he is, concerns about index funds go well beyond bubbles.
A Specter
Legal scholars Lucian A. Bebchuk and Scott Hirst recently published a working paper called "The Specter of the Giant Three." The vast majority of money flowing into index funds are run by three companies: Vanguard, BlackRock, and State Street Global Advisors. Their combined average stake in each of the top 500 American corporations (the S&P 500) has gone from 5.2% in 1998 to 20.5% in 2017.
The market for index funds, Bebchuk and Hirst argue, naturally favors bigness. Managing a trillion dollar fund is not dramatically more expensive than managing a billion dollar firm. This means the big firms can use their larger revenue streams to offer consumers lower fees, giving them a competitive advantage. Innovations in types of index funds are also easy to copy, meaning that it's especially hard for small companies to disrupt the big ones.
As more and more people put their money in index funds, Bebchuk and Hirst believe these companies will just continue getting bigger and bigger. And, unlike many other investors, Vanguard, BlackRock, and State Street reliably vote at shareholder meetings, which makes them even more influential when it comes to company decision-making. If trends continue, Bebhcuk and Hirst project these three companies could cast over 40% of the votes in every single one of the 500 largest American corporations within the next couple decades.
"In this Giant Three scenario, three investment managers would largely dominate shareholder voting in practically all significant U.S. companies that do not have a controlling shareholder," Bebchuk and Hirst warn. They fear this could have drastic implications for corporate governance and competition.
Burry recently told Bloomberg that he sees another massive bubble happening. This time, he says, it's in index funds. Instead of relying on financial experts to actively pick winners and losers, index funds buy everything in a market, passively going up and down as the entire market goes up and down. If you're saving for retirement, there's a good chance you're invested in at least one of them.
In 1995, index funds represented only 4% of the total assets invested in equity mutual funds. By 2015, that had jumped to 34%. There is now over $4 trillion in passive funds indexed to the U.S. stock market, more than the market cap of Microsoft, Apple, Amazon, and Google combined.Index funds make a persuasive offer. Don't pursue the expensive and risky strategy of buying and selling individual stocks. Don't pay brokers or mutual funds big fees to move money around for you. Instead, just park your money in these passive moneymakers, which offer lower fees, diversified risk, and — as the data has made clear — better returns over the long run.
It sounds almost too good to be true, and Burry is arguing it is. And he's not alone in expressing concerns about the astonishing rise of index funds.
The Price Isn't Right
Actively buying and selling stocks and bonds provides a service to the market: It's called "price discovery." If something is overvalued, traders sell it. If it's undervalued, they buy it. That moves the price of the asset — and it is the crucial mechanism to make sure the price is right, signaling its true value.
But index funds don't really discover prices. Investors just dump money into these investments, which mindlessly hold stock in companies whether they're doing well or not. Burry believes the fall of active buying and selling has led to overvaluations, and he's predicting a crash in the value of the large companies held in index funds. "I just don't know what the timeline will be. Like most bubbles, the longer it goes on, the worse the crash will be," he told Bloomberg. He's now investing in small companies, which he says are often ignored by index funds.
Burry has not disclosed much about his data or methodology. And like any trader, he could be wrong. But, even if he is, concerns about index funds go well beyond bubbles.
A Specter
Legal scholars Lucian A. Bebchuk and Scott Hirst recently published a working paper called "The Specter of the Giant Three." The vast majority of money flowing into index funds are run by three companies: Vanguard, BlackRock, and State Street Global Advisors. Their combined average stake in each of the top 500 American corporations (the S&P 500) has gone from 5.2% in 1998 to 20.5% in 2017.
The market for index funds, Bebchuk and Hirst argue, naturally favors bigness. Managing a trillion dollar fund is not dramatically more expensive than managing a billion dollar firm. This means the big firms can use their larger revenue streams to offer consumers lower fees, giving them a competitive advantage. Innovations in types of index funds are also easy to copy, meaning that it's especially hard for small companies to disrupt the big ones.
As more and more people put their money in index funds, Bebchuk and Hirst believe these companies will just continue getting bigger and bigger. And, unlike many other investors, Vanguard, BlackRock, and State Street reliably vote at shareholder meetings, which makes them even more influential when it comes to company decision-making. If trends continue, Bebhcuk and Hirst project these three companies could cast over 40% of the votes in every single one of the 500 largest American corporations within the next couple decades.
"In this Giant Three scenario, three investment managers would largely dominate shareholder voting in practically all significant U.S. companies that do not have a controlling shareholder," Bebchuk and Hirst warn. They fear this could have drastic implications for corporate governance and competition.
by Greg Rosalski, NPR | Read more:
Image: Pixabay
When Biking and Bears Don’t Mix
The death of a ranger, Brad Treat, in 2016 was a wake-up call for grizzly bear biologists.
Mr. Treat, an avid mountain biker, was zipping along at about 25 miles an hour through dense forest near Glacier National Park in the middle of a summer afternoon when he collided with a large male grizzly bear.
Apparently startled, the bear reacted defensively and quickly killed him. A witness couldn’t see what happened but could hear it. “I heard a thud and an ‘argh,’” the unnamed witness told investigators. Then the bear made a noise “like it was hurt.” The bear disappeared before emergency responders arrived.
Dr. Christopher Servheen, who led the committee that investigated Mr. Treat’s death, said the accident prompted him to speak out publicly against recreational sports in the areas where grizzlies live.
This past summer, he tried to stop two ultramarathons in the Flathead National Forest, but the Forest Service approved the contests anyway. One was held this past weekend, at a time when bears are particularly active in foraging for food before their hibernating season begins later this year.
“We tell people not to run in grizzly bear habitat, to make noise and to be aware of their surroundings,” said Dr. Servheen, who has retired from his post as coordinator for the grizzly bear recovery program of the Fish and Wildlife Service. “Agencies are permitting the very activities we are telling people not to do.”
Vast tracts of public land in the West have become favorite haunts of a growing number of mountain bikers, exploring wild areas for recreation. The Trump administration recently allowed e-bikes, or electric bikes, to be used on all federal trails where bicycles are allowed.
The increasing popularity of trail biking has brought to the fore some of the inherent conflicts in the uses of public land — natural regions or playgrounds. And while the growth of tourism may help local businesses, the forays into deeper parts of the forests by more and more people are encroaching on wildlife.
Mechanized mountain bikes and e-bikes, especially at higher speeds, are incompatible with hiking, hunting, and bird and wildlife watching, some argue. Safety is also a concern. Some mountain bikers revel at bombing down trails at 20 or 30 miles per hour on single-track trails that hikers also frequent.
And biologists like Dr. Servheen who have spent decades studying grizzlies offer reminders about protecting the bears and other wildlife that unwittingly share their territory with more people and more mechanized vehicles.
In its report on Mr. Treat’s fatal accident, the interagency committee concluded: “The bear apparently had no time to move to avoid the collision. At a speed of 20-25 miles per hour, there were only one-to-two seconds between rounding the curve, the victim seeing the bear in the trail and impacting the bear.”
Dr. Stephen Herrero, a professor emeritus of ecology at the University of Calgary, spent much of his career studying grizzlies, and is the author of “Bear Attacks: Their Causes and Avoidance.” An avid mountain bike rider, he shares Dr. Servheen’s concerns.
“Bears respond to surprises usually by fleeing, but sometimes by attacking whatever it is that is surprising them,” he said. “Events like runners and bike riders and anything else that suddenly thrusts a disturbance or surprise into their environment, they sometimes respond by attacking.
“I try to avoid mountain biking in any area that is grizzly bear habitat,” Dr. Herrero said. “There are plenty of areas that aren’t.”
Bikers tend to play down the risks. Rebecca Briber, executive director of the Flathead Area Mountain Bikers, said she always carries bear spray with her on rides. “We’re always aware we are recreating in bear country,” she said. “Mountain bike-grizzly bear interactions are rare. It’s more common for hikers to be attacked.”
Other concerns include whether the increase in biking in natural areas could do more to displace grizzlies and other wildlife than hiking, because bikes cover so much more ground, Dr. Servheen said.
“The impacts are mounting because there are more and more mountain bikers and there is more pressure to go into these places with faster bikes and electric mechanized bikes,” he said. “The technology has exceeded our ability to manage it for the benefit of animals.”
Or to understand it. Some experts are raising questions about how fast-moving bikes startle not just bears, but elk, deer and other species, and disrupt their lives.
Dr. Servheen also believes that the sensational news of a grizzly bear killing a bike rider works against the bear from a public relations standpoint. “The response from many people to these kinds of attacks is that grizzly bears are dangerous and their habitat is a dangerous place,” he said. “It’s a cost the bears have to pay in terms of public support and the willingness to have grizzly bears around.”
Because the popularity of biking in these areas has grown rapidly, there is little research on its effects on wildlife. But there is a growing body of evidence that outdoor recreation of all kinds has serious consequences for wildlife.
[ed. This has been a problem in Alaska for years, especially where single-track trails run along salmon streams and are essentially game trails. Bikers there are just as bull-headed, and to suggest that a can of bear spray is going to protect you is ridiculous. One time, I rounded a blind corner on a bicycle and nearly broadsided a grizzly crossing the trail. Missed it by a micro-second and literally brushed it's butt going by. I didn't even have time to press my hand brakes.]
Mr. Treat, an avid mountain biker, was zipping along at about 25 miles an hour through dense forest near Glacier National Park in the middle of a summer afternoon when he collided with a large male grizzly bear.
Apparently startled, the bear reacted defensively and quickly killed him. A witness couldn’t see what happened but could hear it. “I heard a thud and an ‘argh,’” the unnamed witness told investigators. Then the bear made a noise “like it was hurt.” The bear disappeared before emergency responders arrived.
Dr. Christopher Servheen, who led the committee that investigated Mr. Treat’s death, said the accident prompted him to speak out publicly against recreational sports in the areas where grizzlies live.
This past summer, he tried to stop two ultramarathons in the Flathead National Forest, but the Forest Service approved the contests anyway. One was held this past weekend, at a time when bears are particularly active in foraging for food before their hibernating season begins later this year.“We tell people not to run in grizzly bear habitat, to make noise and to be aware of their surroundings,” said Dr. Servheen, who has retired from his post as coordinator for the grizzly bear recovery program of the Fish and Wildlife Service. “Agencies are permitting the very activities we are telling people not to do.”
Vast tracts of public land in the West have become favorite haunts of a growing number of mountain bikers, exploring wild areas for recreation. The Trump administration recently allowed e-bikes, or electric bikes, to be used on all federal trails where bicycles are allowed.
The increasing popularity of trail biking has brought to the fore some of the inherent conflicts in the uses of public land — natural regions or playgrounds. And while the growth of tourism may help local businesses, the forays into deeper parts of the forests by more and more people are encroaching on wildlife.
Mechanized mountain bikes and e-bikes, especially at higher speeds, are incompatible with hiking, hunting, and bird and wildlife watching, some argue. Safety is also a concern. Some mountain bikers revel at bombing down trails at 20 or 30 miles per hour on single-track trails that hikers also frequent.
And biologists like Dr. Servheen who have spent decades studying grizzlies offer reminders about protecting the bears and other wildlife that unwittingly share their territory with more people and more mechanized vehicles.
In its report on Mr. Treat’s fatal accident, the interagency committee concluded: “The bear apparently had no time to move to avoid the collision. At a speed of 20-25 miles per hour, there were only one-to-two seconds between rounding the curve, the victim seeing the bear in the trail and impacting the bear.”
Dr. Stephen Herrero, a professor emeritus of ecology at the University of Calgary, spent much of his career studying grizzlies, and is the author of “Bear Attacks: Their Causes and Avoidance.” An avid mountain bike rider, he shares Dr. Servheen’s concerns.
“Bears respond to surprises usually by fleeing, but sometimes by attacking whatever it is that is surprising them,” he said. “Events like runners and bike riders and anything else that suddenly thrusts a disturbance or surprise into their environment, they sometimes respond by attacking.
“I try to avoid mountain biking in any area that is grizzly bear habitat,” Dr. Herrero said. “There are plenty of areas that aren’t.”
Bikers tend to play down the risks. Rebecca Briber, executive director of the Flathead Area Mountain Bikers, said she always carries bear spray with her on rides. “We’re always aware we are recreating in bear country,” she said. “Mountain bike-grizzly bear interactions are rare. It’s more common for hikers to be attacked.”
Other concerns include whether the increase in biking in natural areas could do more to displace grizzlies and other wildlife than hiking, because bikes cover so much more ground, Dr. Servheen said.
“The impacts are mounting because there are more and more mountain bikers and there is more pressure to go into these places with faster bikes and electric mechanized bikes,” he said. “The technology has exceeded our ability to manage it for the benefit of animals.”
Or to understand it. Some experts are raising questions about how fast-moving bikes startle not just bears, but elk, deer and other species, and disrupt their lives.
Dr. Servheen also believes that the sensational news of a grizzly bear killing a bike rider works against the bear from a public relations standpoint. “The response from many people to these kinds of attacks is that grizzly bears are dangerous and their habitat is a dangerous place,” he said. “It’s a cost the bears have to pay in terms of public support and the willingness to have grizzly bears around.”
Because the popularity of biking in these areas has grown rapidly, there is little research on its effects on wildlife. But there is a growing body of evidence that outdoor recreation of all kinds has serious consequences for wildlife.
by Jim Robbins, NY Times | Read more:
Image: Lido Vizzutti for The New York Times[ed. This has been a problem in Alaska for years, especially where single-track trails run along salmon streams and are essentially game trails. Bikers there are just as bull-headed, and to suggest that a can of bear spray is going to protect you is ridiculous. One time, I rounded a blind corner on a bicycle and nearly broadsided a grizzly crossing the trail. Missed it by a micro-second and literally brushed it's butt going by. I didn't even have time to press my hand brakes.]
Monday, October 7, 2019
Keeping Our Eyes on the Ball
A reader from California, Joe Carroll, writes with an update on political goings-on in his state:
Our governor and legislature have been quite active, passing new bills to confirm our Supreme Court decision that Uber-style employment arrangements do not qualify for independent contractor status, curb spurious vaccine exemptions, set a statewide rent control cap, limit the NCAA’s right to keep student-athletes from being paid for endorsements, somewhat strengthen oversight of charter schools, limit police officers’ ability to legally use deadly force, ban private prisons (eventually… probably…), and possibly even limit payday loan rates to a merely-obscene 36% + the federal funds rate. (We’ll see if that one’s too hot for the governor, as reinstituting the Obama administration’s rules on for-profit colleges apparently was.) All laudable liberal advances, all breaths of fresh air compared to what we’re seeing from the federal government, but also so frustratingly, painfully incremental and notable for their omissions: the governor campaigned on a fracking ban that promptly evaporated; our cap-and-trade program appears to be creating incentives for industry to pretend that they were considering development so that they can sell the credits from deciding not to; cities remain free to determine that a low-income housing development or apartment complex is “out of character with the neighborhood” and insist that it be relocated to someone else’s backyard, while my growing city is closing elementary schools because people increasingly can’t afford to live here while they’re young enough to have school-age children.
So, pretty mixed: some encouraging, some discouraging, but a lot happening that will have major consequences for people’s lives and for the planet generally. I’m grateful for Joe’s update, because I think he has a strong sense for what actually matters and is worth paying attention to. The top three stories on the New York Times right now are “Trump Publicly Urges China To Investigate The Bidens,” “Democrats’ Subpoena Threat Is Latest In Rapidly Unfolding Inquiry,” and “Trump Does It All Himself, And That Worries Republicans.” And the New York Times remains one of the most substantive publications in the world. (The next story is a terrifying piece of reportage about ICE’s use of new surveillance technology.) If you visit MSNBC.com, nearly every story is about Trump. On the main page right now, you’ll find the following stories:
‘A president alone’: Trump lashes out amid inquiry
Trump tries again, publicly recommends Ukraine and China investigate the Bidens
Trump grows emotional as impeachment takes aggressive steps ahead
MaddowBlog: Report implicates VP Pence in intensifying Trump scandal
Analysis: As impeachment war turns hot, Trump sounds partisan rallying cry
There is ‘clear obstruction’ from Trump admin.: Rep. Max Rose on supporting
impeachment inquiry
Trump, GOP accuse Schiff of orchestrating whistleblower complaint (...)
I’m about 1/3 down the page. I give up. You get the point. (You’re also told that if you want to “Keep up with the fast-developing impeachment story… Subscribe to the MSNBC Daily newsletter”) There are a few news stories on MSNBC unrelated to Trump. (There is, for example, a piece of climate change news: “Watch London climate change protest involving 1,800 liters of fake blood go horribly wrong.”) But for the most part, it’s utterly obsessed with the latest micro-developments in the plot of the Trump Show.
Ok, before we go any further: I am not saying that an impeachment inquiry into the President of the United States is not important. I am less concerned, however, with what Rep. Slotkin from Michigan’s 8th Congressional District thinks, or with whether Trump violated Nickelback’s copyright on Twitter. Certainly, since I hadn’t heard about half the things Joe told me about, I rather wish our news organizations had spent a bit more time on what states are doing about payday loans and fracking and a bit less time on what Donald Trump did or did not tell the president of Ukraine.
It somewhat frightens me when I realize how many people watch and enjoy MSNBC, because it shows just how distracted people are getting from what are fairly obviously the most important issues in the world: climate catastrophe, the increasing power of the plutocracy, the threat of nuclear armageddon, the 2 million people in our prisons and the tens of thousands committing suicide each year. These are, to be sure, extremely depressing, and watching Trump is like watching an insane alternate universe version of The West Wing where everybody is pure evil and has a screw loose. Hard not to want to stay glued to that. I understand why MSNBC, as a profit-seeking company, has chosen to focus on this bullshit rather than all the depressing stuff no one wants to hear about.
This is, of course, why I love Bernie Sanders so much. He has a way of hyperfocusing on what matters: people’s medical bills, the need for a Green New Deal, the rebuilding of the labor movement. He has this very satisfying contempt for issues that do not directly affect the conditions of working people’s lives. Yes, impeach the president, but can we talk about Medicare For All?
The alternative to this is something that vaguely resembles politics but is more like the internal drama of a royal court. Read this incredible New York Times profile of Rachel Maddow and you’ll see what I mean. It details how Maddow has become obsessed with Trump, and how her audience has grown and in turn become obsessed with her. (And I do mean obsessed with her. The profile includes a description of one fan who “had a Maddow-themed birthday party, at which her friends and her two young sons put on big black glasses and slicked their hair to the side. Also in attendance was a life-size cardboard cutout of Maddow, which is now in storage so as not to startle guests.”)
The profile describes how the Maddow show now devotes itself to the weaving of conspiratorial webs about Trump. Maddow “carries her viewers along on a wave of verbiage, delivering baroque soliloquies about the Russian state, Trump-administration corruption and American political history.” In the show’s office, “on the wall is a poster of ‘Trump Organization Projects and Partners,’ over which has been tacked the image of Carrie Mathison, the Homeland C.I.A. officer known for her paranoid conspiracy walls and unhinged (but often on-point) investigations.” In fact, Maddow is rather honest about where her interests lie and what kind of show she is doing: “I’m happy to admit that I’m obsessed with Russia. I realize it’s controversial, and people give me a lot of grief for focusing on it. But I make no apologies.”
Interestingly, the profile shows the degree to which Maddow has become a mirror-image version of FOX News, the only difference being that they are pro-Trump and she is anti-Trump.
Our governor and legislature have been quite active, passing new bills to confirm our Supreme Court decision that Uber-style employment arrangements do not qualify for independent contractor status, curb spurious vaccine exemptions, set a statewide rent control cap, limit the NCAA’s right to keep student-athletes from being paid for endorsements, somewhat strengthen oversight of charter schools, limit police officers’ ability to legally use deadly force, ban private prisons (eventually… probably…), and possibly even limit payday loan rates to a merely-obscene 36% + the federal funds rate. (We’ll see if that one’s too hot for the governor, as reinstituting the Obama administration’s rules on for-profit colleges apparently was.) All laudable liberal advances, all breaths of fresh air compared to what we’re seeing from the federal government, but also so frustratingly, painfully incremental and notable for their omissions: the governor campaigned on a fracking ban that promptly evaporated; our cap-and-trade program appears to be creating incentives for industry to pretend that they were considering development so that they can sell the credits from deciding not to; cities remain free to determine that a low-income housing development or apartment complex is “out of character with the neighborhood” and insist that it be relocated to someone else’s backyard, while my growing city is closing elementary schools because people increasingly can’t afford to live here while they’re young enough to have school-age children. So, pretty mixed: some encouraging, some discouraging, but a lot happening that will have major consequences for people’s lives and for the planet generally. I’m grateful for Joe’s update, because I think he has a strong sense for what actually matters and is worth paying attention to. The top three stories on the New York Times right now are “Trump Publicly Urges China To Investigate The Bidens,” “Democrats’ Subpoena Threat Is Latest In Rapidly Unfolding Inquiry,” and “Trump Does It All Himself, And That Worries Republicans.” And the New York Times remains one of the most substantive publications in the world. (The next story is a terrifying piece of reportage about ICE’s use of new surveillance technology.) If you visit MSNBC.com, nearly every story is about Trump. On the main page right now, you’ll find the following stories:
‘A president alone’: Trump lashes out amid inquiry
Trump tries again, publicly recommends Ukraine and China investigate the Bidens
Trump grows emotional as impeachment takes aggressive steps ahead
MaddowBlog: Report implicates VP Pence in intensifying Trump scandal
Analysis: As impeachment war turns hot, Trump sounds partisan rallying cry
There is ‘clear obstruction’ from Trump admin.: Rep. Max Rose on supporting
impeachment inquiry
Trump, GOP accuse Schiff of orchestrating whistleblower complaint (...)
I’m about 1/3 down the page. I give up. You get the point. (You’re also told that if you want to “Keep up with the fast-developing impeachment story… Subscribe to the MSNBC Daily newsletter”) There are a few news stories on MSNBC unrelated to Trump. (There is, for example, a piece of climate change news: “Watch London climate change protest involving 1,800 liters of fake blood go horribly wrong.”) But for the most part, it’s utterly obsessed with the latest micro-developments in the plot of the Trump Show.
Ok, before we go any further: I am not saying that an impeachment inquiry into the President of the United States is not important. I am less concerned, however, with what Rep. Slotkin from Michigan’s 8th Congressional District thinks, or with whether Trump violated Nickelback’s copyright on Twitter. Certainly, since I hadn’t heard about half the things Joe told me about, I rather wish our news organizations had spent a bit more time on what states are doing about payday loans and fracking and a bit less time on what Donald Trump did or did not tell the president of Ukraine.
It somewhat frightens me when I realize how many people watch and enjoy MSNBC, because it shows just how distracted people are getting from what are fairly obviously the most important issues in the world: climate catastrophe, the increasing power of the plutocracy, the threat of nuclear armageddon, the 2 million people in our prisons and the tens of thousands committing suicide each year. These are, to be sure, extremely depressing, and watching Trump is like watching an insane alternate universe version of The West Wing where everybody is pure evil and has a screw loose. Hard not to want to stay glued to that. I understand why MSNBC, as a profit-seeking company, has chosen to focus on this bullshit rather than all the depressing stuff no one wants to hear about.
This is, of course, why I love Bernie Sanders so much. He has a way of hyperfocusing on what matters: people’s medical bills, the need for a Green New Deal, the rebuilding of the labor movement. He has this very satisfying contempt for issues that do not directly affect the conditions of working people’s lives. Yes, impeach the president, but can we talk about Medicare For All?
The alternative to this is something that vaguely resembles politics but is more like the internal drama of a royal court. Read this incredible New York Times profile of Rachel Maddow and you’ll see what I mean. It details how Maddow has become obsessed with Trump, and how her audience has grown and in turn become obsessed with her. (And I do mean obsessed with her. The profile includes a description of one fan who “had a Maddow-themed birthday party, at which her friends and her two young sons put on big black glasses and slicked their hair to the side. Also in attendance was a life-size cardboard cutout of Maddow, which is now in storage so as not to startle guests.”)
The profile describes how the Maddow show now devotes itself to the weaving of conspiratorial webs about Trump. Maddow “carries her viewers along on a wave of verbiage, delivering baroque soliloquies about the Russian state, Trump-administration corruption and American political history.” In the show’s office, “on the wall is a poster of ‘Trump Organization Projects and Partners,’ over which has been tacked the image of Carrie Mathison, the Homeland C.I.A. officer known for her paranoid conspiracy walls and unhinged (but often on-point) investigations.” In fact, Maddow is rather honest about where her interests lie and what kind of show she is doing: “I’m happy to admit that I’m obsessed with Russia. I realize it’s controversial, and people give me a lot of grief for focusing on it. But I make no apologies.”
Interestingly, the profile shows the degree to which Maddow has become a mirror-image version of FOX News, the only difference being that they are pro-Trump and she is anti-Trump.
by Nathan J. Robinson, Current Affairs | Read more:
Image: uncredited
[ed. See also: The Anatomy of MSNBC (Jacobin).]
Sunday, October 6, 2019
My University is Dying
And soon yours will be, too.
Starting in 2016, our state university system endured three successive rounds of annual budget cuts, with average 10-percent reductions resulting in a loss of more than a third of the system’s overall funding. Additional cuts, even, were on the table this past year. And while our state legislators ultimately avoided taking yet one more stab at the dismembered body of higher education, there has been no discussion of restoring any of those funds.
The experience of living with the metastasizing effects of austerity grants me some insight into what has been going on in Alaska. In July, Alaska Gov. Mike Dunleavy announced a plan to strip the University of Alaska system of 41 percent of its operating budget. He has since tempered this plan, opting instead for a 20-percent cut to be meted out over a period of three years. After weathering three straight years of forced retirements, self-protective “pivots” to administration, and personal waterloos on my own campus, I cannot help but grieve for my colleagues in Alaska. Some of them, I know, will lose their jobs, or else be coerced into giving them up, as my own colleagues have been (my department lost 10 tenured/tenure-track faculty members — half of its roster — in four years and has not been permitted to rehire). But some of them, I know, will not, and I grieve for them, too. Back in 2013, when I was finishing up my dissertation and heading out “on the market,” I did so in the company of a number of other tenure-track hopefuls. The end of that year saw two of us packing up and heading off to new jobs: me to North Dakota, another to Alaska. A third colleague at a nearby school went off to Wyoming. What all of these states and all of these schools have in common, of course, are economies that rely on natural-resource extraction. When the budget cuts first hit North Dakota in 2016, our state legislature cited falling oil prices. I had been hired at the tail end of a boom that was just starting to taper off and resemble healthily average rates of production.
Oil production in the state has grown since then and now outpaces the boom rates of 2014, even. But our campus has not recovered. The same will be true in Alaska, where the governor’s veto was spurred by campaign promises touting higher household revenue from the state’s Permanent Fund, which pays out dividends from oil revenue to private citizens.
Our campus has struggled to recover, first, because austerity isn’t over for us, even if the blitzkrieg of cuts has stalled for the time being. The second reason is because there are fewer people around now to help see each other through the grueling work of recovery. We lost our top-ranked women’s hockey team, which nurtured many an Olympian over the years; we lost whole programs and departments, or else saw them so hollowed from the inside as to effectively be lost. We survivors lost friends, colleagues, and neighbors. No one from my college, which is the largest at UND, a flagship state school, went up for tenure last year, because there was no one left who was eligible to apply.
But these are the obvious losses, the ones that could be counted and read about in the local newspaper, or in the The Chronicle. It is the many and lingering surreptitious forms of loss — loss of confidence, of spirit, of purpose — that do the real damage.
In the spring of 2018, I found myself occupying a spot at a banquet table as part of our campus’s annual Founders Day festivities. The event honors faculty and staff who are retiring from the university, alongside those who have won awards for service, research, or teaching. Two of my departmental colleagues were included among the latter, so a small group of us reserved a table (everyone — including award-winners — must pay to attend). No words can describe the bleakness of an affair recognizing dozens and dozens of middle-aged, energetic employees who have been told that it is the end of their career. The theme for the evening was a 1950s sock hop, which couldn’t have been less appropriate given the age of most of the honorees. Then there were the speeches. The president was supposed to serve as master of ceremonies, but he couldn’t attend because he was interviewing for a job at another university. (He didn’t get it, but he got one a year later and has since moved on.)
This is what I’m talking about when I talk about living with, or surviving, austerity. I’m talking about the nonmaterial consequences of material resource depletion, which can last for generations and make earnest attempts at normalcy appear shot through with undercurrents of gloom. But the feeling isn’t unique to campuses like mine — campuses that have already met and locked horns with the new, ascetic order.
by Sheila Liming, The Chronicle Review | Read more:
Image: U. of North Dakota (Sheila Liming)
[ed. Too bad articles like this on the state of education are blocked by paywalls. Says a lot about priorities.]
Three Big Things: The Most Important Forces Shaping the World
An irony of studying history is that we often know exactly how a story ends, but have no idea where it began.
Here’s an example. What caused the financial crisis?
Well, you have to understand the mortgage market.
What shaped the mortgage market? Well, you have to understand the 30-year decline in interest rates that preceded it.
What caused falling interest rates? Well, you have to understand the inflation of the 1970s.
What caused that inflation? Well, you have to understand the monetary system of the 1970s and the hangover effects from the Vietnam War.
What caused the Vietnam War? Well, you have to understand the West’s fear of communism after World War II …
And so on endlessly.
Every current event – big or small – has parents, grandparents, great grandparents, siblings, and cousins. Ignoring that family tree can muddy your understanding of events, giving a false impression of why things happened, how long they might last, and under what circumstances they might happen again. Viewing events in isolation, without an appreciation for their long roots, helps explain everything from why forecasting is hard to why politics is nasty.
Those roots can snake back infinitely. But the deeper you dig, the closer you get to the Big Things: the handful of events that are so powerful they influence a range of seemingly unrelated topics.
The ultimate of those great-grandmother events was World War II.
It’s hard to overstate how much the world reset from 1939 to 1945, and how deeply the changes the war left behind went on to define virtually everything that’s happened since.
Penicillin owes its existence to the war. So do radar, jets, nuclear energy, rockets, and helicopters. Subsidizing consumption with consumer credit and tax-deductible interest were deliberate policies meant to keep the economy afloat after war-time production ended. The highways you drove on this morning were built to evacuate cities and mobilize the military in case of a nuclear bomb attack during the Cold War, and the Cold War was a WW2 cousin. Same for the internet.
The Civil Rights movement – perhaps the most important social and political event of our time – began in earnest with racial integration during the war.
The female laborforce grew by 6.5 million during the war because women were needed in factories. Most kept working after the war ended, beginning a trend that led to a doubling of the female laborforce participation rate by 1990. It’s probably the single most important economic event of our lifetime.
Find something that’s important to you in 2019 – social, political, economic, whatever – and with a little effort you can trace the roots of its importance back to World War II. There are so few exceptions to this rule it’s astounding.
But it’s not just astounding. It’s an example of something easy to overlook: If you don’t spend a little time understanding World War II’s causes and outcomes, you’re going to have a hard time understanding why the last 60 years have played out the way they have.
You’ll struggle to understand how the biggest technologies got off the ground, and how the most important innovations are born from panic-induced necessity more than cozy visions.
Or why household debt has risen the way it has.
Or why Europeans have different views on social safety nets than Americans. John Maynard Keynes predicted countries wrecked by war would go on to have a “craving for social and personal security,” and indeed they did. Historian Tony Judt writes of post-war Europe:
Which raises the question: What else is like World War II?
What are the other Big Things – the great-grandparents – of important topics today that we need to study if we want to understand what’s happening in the world?
Nothing is as influential as World War II has been. But there are a few other Big Things worth paying attention to, because they’re the root influencer of so many other topics.
The three big ones that stick out are demographics, inequality, and access to information.
There are hundreds of forces shaping the world not mentioned here. But I’d argue that many, even most, are derivatives of those three.
Each of these Big Things will have a profound impact on the coming decades because they’re both transformational and ubiquitous. They impact nearly everyone, albeit in different ways. With that comes the reality that we don’t know exactly how their influence will unfold. No one in 1945 knew exactly how World War II would go on to shape the world, only that it would in extreme ways. But we can guess some of the likeliest changes.
by Morgan Housel, Collaborative Fund | Read more:
Image: Census Bureau
Here’s an example. What caused the financial crisis?
Well, you have to understand the mortgage market.
What shaped the mortgage market? Well, you have to understand the 30-year decline in interest rates that preceded it.
What caused falling interest rates? Well, you have to understand the inflation of the 1970s.What caused that inflation? Well, you have to understand the monetary system of the 1970s and the hangover effects from the Vietnam War.
What caused the Vietnam War? Well, you have to understand the West’s fear of communism after World War II …
And so on endlessly.
Every current event – big or small – has parents, grandparents, great grandparents, siblings, and cousins. Ignoring that family tree can muddy your understanding of events, giving a false impression of why things happened, how long they might last, and under what circumstances they might happen again. Viewing events in isolation, without an appreciation for their long roots, helps explain everything from why forecasting is hard to why politics is nasty.
Those roots can snake back infinitely. But the deeper you dig, the closer you get to the Big Things: the handful of events that are so powerful they influence a range of seemingly unrelated topics.
The ultimate of those great-grandmother events was World War II.
It’s hard to overstate how much the world reset from 1939 to 1945, and how deeply the changes the war left behind went on to define virtually everything that’s happened since.
Penicillin owes its existence to the war. So do radar, jets, nuclear energy, rockets, and helicopters. Subsidizing consumption with consumer credit and tax-deductible interest were deliberate policies meant to keep the economy afloat after war-time production ended. The highways you drove on this morning were built to evacuate cities and mobilize the military in case of a nuclear bomb attack during the Cold War, and the Cold War was a WW2 cousin. Same for the internet.
The Civil Rights movement – perhaps the most important social and political event of our time – began in earnest with racial integration during the war.
The female laborforce grew by 6.5 million during the war because women were needed in factories. Most kept working after the war ended, beginning a trend that led to a doubling of the female laborforce participation rate by 1990. It’s probably the single most important economic event of our lifetime.
Find something that’s important to you in 2019 – social, political, economic, whatever – and with a little effort you can trace the roots of its importance back to World War II. There are so few exceptions to this rule it’s astounding.
But it’s not just astounding. It’s an example of something easy to overlook: If you don’t spend a little time understanding World War II’s causes and outcomes, you’re going to have a hard time understanding why the last 60 years have played out the way they have.
You’ll struggle to understand how the biggest technologies got off the ground, and how the most important innovations are born from panic-induced necessity more than cozy visions.
Or why household debt has risen the way it has.
Or why Europeans have different views on social safety nets than Americans. John Maynard Keynes predicted countries wrecked by war would go on to have a “craving for social and personal security,” and indeed they did. Historian Tony Judt writes of post-war Europe:
Only the state could offer hope or salvation to the mass of the population. And in the aftermath of depression, occupation and civil war, the state—as an agent of welfare, security and fairness—was a vital source of community and social cohesion.There are so many things happening today that aren’t easy to grasp without a working knowledge of the 75-year-old wartime forces that got them going in the first place. To me, the war is fascinating to study not because of what happened, but what it went on to influence.
Which raises the question: What else is like World War II?
What are the other Big Things – the great-grandparents – of important topics today that we need to study if we want to understand what’s happening in the world?
Nothing is as influential as World War II has been. But there are a few other Big Things worth paying attention to, because they’re the root influencer of so many other topics.
The three big ones that stick out are demographics, inequality, and access to information.
There are hundreds of forces shaping the world not mentioned here. But I’d argue that many, even most, are derivatives of those three.
Each of these Big Things will have a profound impact on the coming decades because they’re both transformational and ubiquitous. They impact nearly everyone, albeit in different ways. With that comes the reality that we don’t know exactly how their influence will unfold. No one in 1945 knew exactly how World War II would go on to shape the world, only that it would in extreme ways. But we can guess some of the likeliest changes.
Image: Census Bureau
Saturday, October 5, 2019
Guide to Aging
Look down at your hand. Flex the tendons, watch them ripple under the skin. What a nice design! So silent and quick. That’s what they never get in these cyborg movies: the fact that a really good design doesn’t whirr and clank. It’s silent and quick, like bodies are. Like yours. Yours, these sinews; and that long, stretchable leg, genital toy, brave shoulders, stubborn toes, a zoo of perfect forms and all yours for the price of admission.
There’s only one little flaw: you are trapped in the body of a dying animal. In fact, you can see how far gone you are just by testing the skin of that hand of yours. Try pinching the skin on the back of your hand. Now let it go. Count the seconds it takes to smooth itself out. The longer it takes, the older your skin is.
And here’s a really cheering bit of news: your skin, the largest organ in your body, is also the organ which ages most slowly. So however depressing it may be to look at the skin of your hand wearily resuming its proper shape, you can make yourself feel even worse by remembering that things are much, much worse on the inside. Your liver, your lungs, your heart, your joints — all the things you can’t see are decaying much faster than your skin.
When you first see your skin dying, you assume there’s a quick fix: what’s that stuff, rototonin or something? You rub it on and your skin youngs up. But it’s expensive, embarrassing, and only works for a while. You forget to put it on, and the wadis of your skin deepen. Meanwhile, the last fringe of hair has vanished from the Sahel of your forehead, your eyebrows begin to look Brezhnevian, your back is hairier than a tarantula’s, and your breasts are bigger than your wife’s.
There’s been a mistake. Someone screwed up the design, with malicious intent. Can you sue Darwin? Can you negotiate an exit from this dying animal? Apparently not. What are we, mere medieval peasants, serfs? Absolutely.
It gets worse. Aging is drying; the cells get scaly, reptilian, sagging like Iguana-hide. It’s not so droll anymore. It invades your dreams: quick cuts of teeth crumbling and hair shedding like an old dog’s ass, in close-ups that scare you awake. (...)
Aging is shrinking: cells wink out and you’re literally a smaller person than you were. You’re a walking brownout. Dead muscle, never to be replaced, is squeezed through your increasingly inefficient anus. In a typical Darwinian joke, the dead cells are processed into hard, unfriendly turds which sandpaper the anus until you grow a little grape-cluster of hemorrhoids. Nature is efficient, and never smacks you once when it can whack you twice.
As biological catastrophes accumulate, more and more of your mental energy is devoted to blocking the signals broadcasting damage and decay from sites all over the body. If you listened to these signals, you’d scream and collapse. You’re a dry-land version of those salmon in the grizzly documentaries, the humped mutant fish whose bodies are dead but still swimming, covered with necrotic patches, constantly flaking away downstream.
All these pain-broadcasts have their bitter stories, most of them reminders of avoidable injuries. The knee — whose fault is that? Yours. Every time you walk more than fifty yards, that knee broadcasts the phrase “bone on bone.” The tissues that were installed at the factory have worn down like old shock absorbers that bang against the frame. Then there’s your heart, and the jaw thing, and your queasy gut. Your fault, your fault, and your fault, respectively.
But the worst torments are the ones too dumb to be tragic — the gnat buzzes of the aging body. There’s a patch of skin in your left ear that starts itching as soon as you get into bed, and grows a pale scab which you must scrape away with the nail of your little finger every week or so. The doctor doesn’t believe in it, and you sound like a whining fool when you try to explain. So you resort to the fingernail-gouging approach. Naturally, it gets infected. This is your own fault. All these trivial nightmares are (a) ridiculous, and (b) your own fault.
You’re married to a slut, a slave: a human body. And try getting a divorce from that wife, baby. When you’re married to your body, it really is “till death do you part.” Short of walking off the tenth floor or eating a 12-gauge, you and your body are as married as a couple of Mormons. That’s Earth, man: one big Utah. Monogamy, you and your body sliding into decay hand in hand. Touching, huh?
But it all started out so well! You replay it over and over (because you seem to spend a lot of hours lying down these days)…but no matter how many times you rewind, it comes out the same way. Let’s face it: you never had a chance, any more than the trilobites did. All you can do is play it back, and back, and back.
Ready? It doesn’t matter if you’re ready. The eXile is here to dim the lantern as we guide you through a tour of the most horrible plot the world has ever known: Aging.
Age: Birth to 10 Years
The first three years were nightmare material, from falling out of a uterus to facing the fact that you’re going to be a tetraplegic feces-factory for a couple of years. Come to think of it, that’s how you’re likely to spend your last few years, thanks to modern medicine, so maybe infancy is good training for your slow and expensive stay at the Pray for Death Convalescent Hospital. But Nature, the sadistic tapeworm who set up this existence, doesn’t trust you to deal with the horrible memories of your first three years. That’s why she set up this clever little subprogram: at the age of four, your brain will automatically delete all memories. Every wonder why kids smile? That’s why: they’ve had a brainwipe, and it’s the nicest thing, maybe the only nice thing, Ma Nature will ever do for them.
But from five to puberty it gets better. After you bang your head against the table 10,000 times, your growing brain begins to suspect it might be better to duck. This is how we learn: pain and pain and pain and pain. But at least you’re getting better. Well, taller at least. There are finally other children who are smaller and weaker than you. Nature put these creatures on earth as victims, so after you do your time as jailhouse bitch to the other kids in kindergarten, it’s your turn to torture and fondle the fresh fish. The body understands and appreciates this and becomes happy. This is because the body is a fascist thug.
At the end of the first decade, you’re an old hand. You can make the body do pretty much anything you want. Nothing breaks. Everything heals. And you know, from watching older kids, that there’s this weird mutation ahead, something to do with the wriggly parts of movies.
by John Dolan, eXile | Read more:
Image: uncredited
There’s only one little flaw: you are trapped in the body of a dying animal. In fact, you can see how far gone you are just by testing the skin of that hand of yours. Try pinching the skin on the back of your hand. Now let it go. Count the seconds it takes to smooth itself out. The longer it takes, the older your skin is.
And here’s a really cheering bit of news: your skin, the largest organ in your body, is also the organ which ages most slowly. So however depressing it may be to look at the skin of your hand wearily resuming its proper shape, you can make yourself feel even worse by remembering that things are much, much worse on the inside. Your liver, your lungs, your heart, your joints — all the things you can’t see are decaying much faster than your skin.
When you first see your skin dying, you assume there’s a quick fix: what’s that stuff, rototonin or something? You rub it on and your skin youngs up. But it’s expensive, embarrassing, and only works for a while. You forget to put it on, and the wadis of your skin deepen. Meanwhile, the last fringe of hair has vanished from the Sahel of your forehead, your eyebrows begin to look Brezhnevian, your back is hairier than a tarantula’s, and your breasts are bigger than your wife’s.There’s been a mistake. Someone screwed up the design, with malicious intent. Can you sue Darwin? Can you negotiate an exit from this dying animal? Apparently not. What are we, mere medieval peasants, serfs? Absolutely.
It gets worse. Aging is drying; the cells get scaly, reptilian, sagging like Iguana-hide. It’s not so droll anymore. It invades your dreams: quick cuts of teeth crumbling and hair shedding like an old dog’s ass, in close-ups that scare you awake. (...)
Aging is shrinking: cells wink out and you’re literally a smaller person than you were. You’re a walking brownout. Dead muscle, never to be replaced, is squeezed through your increasingly inefficient anus. In a typical Darwinian joke, the dead cells are processed into hard, unfriendly turds which sandpaper the anus until you grow a little grape-cluster of hemorrhoids. Nature is efficient, and never smacks you once when it can whack you twice.
As biological catastrophes accumulate, more and more of your mental energy is devoted to blocking the signals broadcasting damage and decay from sites all over the body. If you listened to these signals, you’d scream and collapse. You’re a dry-land version of those salmon in the grizzly documentaries, the humped mutant fish whose bodies are dead but still swimming, covered with necrotic patches, constantly flaking away downstream.
All these pain-broadcasts have their bitter stories, most of them reminders of avoidable injuries. The knee — whose fault is that? Yours. Every time you walk more than fifty yards, that knee broadcasts the phrase “bone on bone.” The tissues that were installed at the factory have worn down like old shock absorbers that bang against the frame. Then there’s your heart, and the jaw thing, and your queasy gut. Your fault, your fault, and your fault, respectively.
But the worst torments are the ones too dumb to be tragic — the gnat buzzes of the aging body. There’s a patch of skin in your left ear that starts itching as soon as you get into bed, and grows a pale scab which you must scrape away with the nail of your little finger every week or so. The doctor doesn’t believe in it, and you sound like a whining fool when you try to explain. So you resort to the fingernail-gouging approach. Naturally, it gets infected. This is your own fault. All these trivial nightmares are (a) ridiculous, and (b) your own fault.
You’re married to a slut, a slave: a human body. And try getting a divorce from that wife, baby. When you’re married to your body, it really is “till death do you part.” Short of walking off the tenth floor or eating a 12-gauge, you and your body are as married as a couple of Mormons. That’s Earth, man: one big Utah. Monogamy, you and your body sliding into decay hand in hand. Touching, huh?
But it all started out so well! You replay it over and over (because you seem to spend a lot of hours lying down these days)…but no matter how many times you rewind, it comes out the same way. Let’s face it: you never had a chance, any more than the trilobites did. All you can do is play it back, and back, and back.
Ready? It doesn’t matter if you’re ready. The eXile is here to dim the lantern as we guide you through a tour of the most horrible plot the world has ever known: Aging.
Age: Birth to 10 Years
The first three years were nightmare material, from falling out of a uterus to facing the fact that you’re going to be a tetraplegic feces-factory for a couple of years. Come to think of it, that’s how you’re likely to spend your last few years, thanks to modern medicine, so maybe infancy is good training for your slow and expensive stay at the Pray for Death Convalescent Hospital. But Nature, the sadistic tapeworm who set up this existence, doesn’t trust you to deal with the horrible memories of your first three years. That’s why she set up this clever little subprogram: at the age of four, your brain will automatically delete all memories. Every wonder why kids smile? That’s why: they’ve had a brainwipe, and it’s the nicest thing, maybe the only nice thing, Ma Nature will ever do for them.
But from five to puberty it gets better. After you bang your head against the table 10,000 times, your growing brain begins to suspect it might be better to duck. This is how we learn: pain and pain and pain and pain. But at least you’re getting better. Well, taller at least. There are finally other children who are smaller and weaker than you. Nature put these creatures on earth as victims, so after you do your time as jailhouse bitch to the other kids in kindergarten, it’s your turn to torture and fondle the fresh fish. The body understands and appreciates this and becomes happy. This is because the body is a fascist thug.
At the end of the first decade, you’re an old hand. You can make the body do pretty much anything you want. Nothing breaks. Everything heals. And you know, from watching older kids, that there’s this weird mutation ahead, something to do with the wriggly parts of movies.
by John Dolan, eXile | Read more:
Image: uncredited
Friday, October 4, 2019
Steely Dan
[I'm working on gospel time these days (Summer, the summer. This could be the cool part of the summer). The sloe-eyed creature in the reckless room, she's so severe. A wise child walks right out of here. I'm so excited I can barely cope. I'm sizzling like an isotope. I'm on fire, so cut me some slack. First she's way gone, then she comes back. She's all business, then she's ready to play. She's almost Gothic in a natural way. This house of desire is built foursquare. (City, the city. The cleanest kitten in the city). When she speaks, it's like the slickest song I've ever heard. I'm hanging on her every word. As if I'm not already blazed enough. She hits me with the cryptic stuff. That's her style, to jerk me around. First she's all feel, then she cools down. She's pure science with a splash of black cat. She's almost Gothic and I like it like that. This dark place, so thrilling and new. It's kind of like the opposite of an aerial view. Unless I'm totally wrong. I hear her rap, and, brother, it's strong. I'm pretty sure that what she's telling me is mostly lies. But I just stand there hypnotized. I'll just have to make it work somehow. I'm in the amen corner now. It's called love, I spell L-U-V. First she's all buzz, then she's noise-free. She's bubbling over, then there's nothing to say. She's almost Gothic in a natural way. She's old school, then she's, like, young. Little Eva meets the Bleecker Street brat. She's almost Gothic, but it's better than that. ~ Almost Gothic.
[ed. Sizzling like an isotope. See also: What a Shame About Me (lyrics) and West of Hollywood.]
Malfunctioning Sex Robot
I was hired as an assassin. You don’t bring in a 37-year-old woman to review John Updike in the year of our Lord 2019 unless you’re hoping to see blood on the ceiling. ‘Absolutely not,’ I said when first approached, because I knew I would try to read everything, and fail, and spend days trying to write an adequate description of his nostrils, and all I would be left with after months of standing tiptoe on the balance beam of objectivity and fair assessment would be a letter to the editor from some guy named Norbert accusing me of cutting off a great man’s dong in print. But then the editors cornered me drunk at a party, and here we are.
One woman, informed of my project, visibly retched over her quail. ‘No, listen,’ I told her, ‘there is something there. People write well about him,’ and I saw the red line of her estimation plunge like the Dow Jones. ‘Didn’t he write that thing,’ someone else said, ‘about how women don’t know how to piss, because their insides are too complicated?’ (Yes, in multiple books. It is at best puzzling, and at worst an indictment of both Pennsylvania public schools and Harvard.) ‘Please tell me you’re writing something about Updike’s 9/11 book,’ another said. ‘Can’t do that,’ I responded, ‘because I’m pretty sure I would die while reading it, and that would be another victim for 9/11.’ Taste and tact had departed hand in hand; I had been reading too much John Hoyer Updike.
In a 1997 review for the New York Observer, the recently kinged David Foster Wallace diagnosed how far Updike had fallen in the esteem of a younger generation. ‘Penis with a thesaurus’ is the phrase that lives on, though it is not the levelling blow it first appears; one feels oddly proud, after all, of a penis that has learned to read. Today, he has fallen even further, still in the pantheon but marked by an embarrassed asterisk: DIED OF PUSSY-HOUNDING. No one can seem to agree on his surviving merits. He wrote like an angel, the consensus goes, except when he was writing like a malfunctioning sex robot attempting to administer cunnilingus to his typewriter. Offensive criticism of him is often reductive, while defensive criticism has a strong flavour of people-are-being-mean-to-my-dad. There’s so much of him, spread over so much time, that perhaps everyone has read a different John Updike.
I began from a place of love, the charmed garden of his early novels, stories and critical essays. I read Rabbit, Run when I was 12 with a sense of accumulating speed and transport I have rarely felt since, though a confusion about what exactly Rabbit was doing to Janice’s ass in that fateful scene persisted into adulthood and probably did lasting damage. (Women! Let your husbands come on your ass extremely soon after you give birth or else you will drown your own baby!) I assumed he would continue in this general tradition, his landscapes delicately dotted with the dandelions of misogyny. I knew he had no idea how women pissed. Was I wrong about the rest? Had I misremembered certain splendours? It was possible. Due to certain quirks in my upbringing, I love men easily, which is either Christly or some slut thing. My antagonism toward the Great Male Narcissists, as Wallace called them, is far milder than might be expected, and mostly takes the form of my wanting to wrestle them at sleepovers, slowly but inexorably, through the use of black magic, turning them into lumberjack lesbians. (...)
The plainness of his biography offers the consolations of the lumberyard: all that neatly stacked blond wood, a testament not just to his soundness and his industry, but to some rich green complacency in the valley that grew him. He was born in Pennsylvania in 1932 to Wesley and Linda Hoyer Updike. His parents, and grandparents, rocked him like a handmade cradle; in ‘Midpoint’ he calls himself the fifth point of their star. ‘I was made to feel that I could do things. If you get this feeling early and can hold it until you’re 15, you tend never to lose it.’
The one reverberating trauma of his childhood seems to have been the family’s 1945 move from Shillington, where he spent the first 13 years of his life, to a farm in Plowville, after his mother made a command decision to buy the house where she had been born in 1904 and return them to a place she remembered as paradise. The solitude there verged on quarantine; the close harmonies of his four elders (his mother’s parents lived with them) repeated, turned dissonant, and set his teeth on edge; the place almost certainly made him a writer. Linda, who possessed literary aspirations for both of them, and who published her own stories in the New Yorker after her son became a fixture there, had believed it would, and she was right, but he never really forgave her. It is his father’s teacherly portrait that is fixed with so much sympathy in the National Book Award-winning The Centaur, but it is his mother’s figure that walks the halls of his fiction, wearing through the floorboards in her rounds, casting illumination on the walls and ceilings. She throws her voice and her atmospheres through his keyholes; it is his mother’s eye that examines his characters’ wives, to see whether they are good enough for him. ‘He knew he and his mother were regarded as having been unusually, perhaps unnaturally close; when in fact between themselves the fear was that they were not close enough,’ he wrote in ‘A Sandstone Farmhouse’ (1990). In a fine late interview Barbara Probst Solomon asked him about his habit of painting women in his fiction, rather than inhabiting them. ‘I suppose I’m male enough to be more excited by the outsides of women than their insides,’ he began.
In a chronological reading, the serious lapse in form comes earlier – with Couples (1968), the novel that chronicled the adulterous whirlwind of the early Ipswich years and notoriously made Updike a million dollars. Perhaps I am more puritanical than I realised, because the mere thought of wife-swapping in New England against the backdrop of the Vietnam War sinks my heart like a stone to the riverbed of my body; even so, I can say with reasonable assurance that the book is bad. Something chants behind the prose, even when it’s good: waste, waste, waste, waste. Sodden somehow, as if the sad Old Fashioned that Janice was drinking at the beginning of Rabbit, Run had spilled and seeped into the text. Dim, carpeted, brown, pressing our faces perpetually into the plaid of some couch. It is also the book in which Updike becomes 25 per cent more interested in feet, which is not something the world needed.
As I read I actually felt my teeth getting stronger, like a teenage dinosaur. I wanted to grab at the waist, wrench and kill – what? Some part of my own history, the story of my grandparents crawling home drunk after bridge games in the new suburban paradises my grandfather helped build, dressed in the loudest of loud checks. Updike’s reliably beautiful descriptions, always his strength far above dialogue, plot and characterisation, now betrayed my faith on every other page: how can a man who lights on the phrase ‘tulip sheen’ to describe the skin of a woman’s breast use a racial slur to describe another woman’s labia in the same book? Some cruelty in him moves to the forefront, as well as a burgeoning distaste for the politics of the counterculture whose sexual advances made it possible for him to write in extended milky detail about swingers breastfeeding one another in the bathroom.
[ed. 911? Hello. I'd like to report a murder. What an essay/retrospective by Ms Lockwood! This is how you do it.]
One woman, informed of my project, visibly retched over her quail. ‘No, listen,’ I told her, ‘there is something there. People write well about him,’ and I saw the red line of her estimation plunge like the Dow Jones. ‘Didn’t he write that thing,’ someone else said, ‘about how women don’t know how to piss, because their insides are too complicated?’ (Yes, in multiple books. It is at best puzzling, and at worst an indictment of both Pennsylvania public schools and Harvard.) ‘Please tell me you’re writing something about Updike’s 9/11 book,’ another said. ‘Can’t do that,’ I responded, ‘because I’m pretty sure I would die while reading it, and that would be another victim for 9/11.’ Taste and tact had departed hand in hand; I had been reading too much John Hoyer Updike.
In a 1997 review for the New York Observer, the recently kinged David Foster Wallace diagnosed how far Updike had fallen in the esteem of a younger generation. ‘Penis with a thesaurus’ is the phrase that lives on, though it is not the levelling blow it first appears; one feels oddly proud, after all, of a penis that has learned to read. Today, he has fallen even further, still in the pantheon but marked by an embarrassed asterisk: DIED OF PUSSY-HOUNDING. No one can seem to agree on his surviving merits. He wrote like an angel, the consensus goes, except when he was writing like a malfunctioning sex robot attempting to administer cunnilingus to his typewriter. Offensive criticism of him is often reductive, while defensive criticism has a strong flavour of people-are-being-mean-to-my-dad. There’s so much of him, spread over so much time, that perhaps everyone has read a different John Updike.I began from a place of love, the charmed garden of his early novels, stories and critical essays. I read Rabbit, Run when I was 12 with a sense of accumulating speed and transport I have rarely felt since, though a confusion about what exactly Rabbit was doing to Janice’s ass in that fateful scene persisted into adulthood and probably did lasting damage. (Women! Let your husbands come on your ass extremely soon after you give birth or else you will drown your own baby!) I assumed he would continue in this general tradition, his landscapes delicately dotted with the dandelions of misogyny. I knew he had no idea how women pissed. Was I wrong about the rest? Had I misremembered certain splendours? It was possible. Due to certain quirks in my upbringing, I love men easily, which is either Christly or some slut thing. My antagonism toward the Great Male Narcissists, as Wallace called them, is far milder than might be expected, and mostly takes the form of my wanting to wrestle them at sleepovers, slowly but inexorably, through the use of black magic, turning them into lumberjack lesbians. (...)
The plainness of his biography offers the consolations of the lumberyard: all that neatly stacked blond wood, a testament not just to his soundness and his industry, but to some rich green complacency in the valley that grew him. He was born in Pennsylvania in 1932 to Wesley and Linda Hoyer Updike. His parents, and grandparents, rocked him like a handmade cradle; in ‘Midpoint’ he calls himself the fifth point of their star. ‘I was made to feel that I could do things. If you get this feeling early and can hold it until you’re 15, you tend never to lose it.’
The one reverberating trauma of his childhood seems to have been the family’s 1945 move from Shillington, where he spent the first 13 years of his life, to a farm in Plowville, after his mother made a command decision to buy the house where she had been born in 1904 and return them to a place she remembered as paradise. The solitude there verged on quarantine; the close harmonies of his four elders (his mother’s parents lived with them) repeated, turned dissonant, and set his teeth on edge; the place almost certainly made him a writer. Linda, who possessed literary aspirations for both of them, and who published her own stories in the New Yorker after her son became a fixture there, had believed it would, and she was right, but he never really forgave her. It is his father’s teacherly portrait that is fixed with so much sympathy in the National Book Award-winning The Centaur, but it is his mother’s figure that walks the halls of his fiction, wearing through the floorboards in her rounds, casting illumination on the walls and ceilings. She throws her voice and her atmospheres through his keyholes; it is his mother’s eye that examines his characters’ wives, to see whether they are good enough for him. ‘He knew he and his mother were regarded as having been unusually, perhaps unnaturally close; when in fact between themselves the fear was that they were not close enough,’ he wrote in ‘A Sandstone Farmhouse’ (1990). In a fine late interview Barbara Probst Solomon asked him about his habit of painting women in his fiction, rather than inhabiting them. ‘I suppose I’m male enough to be more excited by the outsides of women than their insides,’ he began.
I don’t know. My mother was a very eloquent woman who was constantly offering to share her thoughts with me, and maybe I got an overdose of female thought early. There’s a kind of a heat about female confidences, this tremendous female heat, and you sort of run backwards and try to find some guys to play a little softball with. But, oh, there’s this sense of women being almost too much, too wonderful, too sensitive, and yet somehow wounded – wounded I suppose by their disadvantage within the society.If I linger here, it is because this is the ground that gives us some of his best stories and most unusual perceptions. Here he was tormented by a sense of immensity that sometimes leaned down to peer at him through its microscope, or descended from a screaming height to chase him through the streets. He felt his smallness, a single squirm in an unbearable swarm. The slow-ticking clock on the wall took little bites of him, his eyes were bright with hayfever, his asthmatic lungs gasped for air. The halo of selfhood had descended: one minute it was wide enough to circle the globe, and the next minute it was tight enough to squeeze the breath out of him. What must he do – how must he underline and lift himself – to ensure that God did not ever let him die? (...)
In a chronological reading, the serious lapse in form comes earlier – with Couples (1968), the novel that chronicled the adulterous whirlwind of the early Ipswich years and notoriously made Updike a million dollars. Perhaps I am more puritanical than I realised, because the mere thought of wife-swapping in New England against the backdrop of the Vietnam War sinks my heart like a stone to the riverbed of my body; even so, I can say with reasonable assurance that the book is bad. Something chants behind the prose, even when it’s good: waste, waste, waste, waste. Sodden somehow, as if the sad Old Fashioned that Janice was drinking at the beginning of Rabbit, Run had spilled and seeped into the text. Dim, carpeted, brown, pressing our faces perpetually into the plaid of some couch. It is also the book in which Updike becomes 25 per cent more interested in feet, which is not something the world needed.
As I read I actually felt my teeth getting stronger, like a teenage dinosaur. I wanted to grab at the waist, wrench and kill – what? Some part of my own history, the story of my grandparents crawling home drunk after bridge games in the new suburban paradises my grandfather helped build, dressed in the loudest of loud checks. Updike’s reliably beautiful descriptions, always his strength far above dialogue, plot and characterisation, now betrayed my faith on every other page: how can a man who lights on the phrase ‘tulip sheen’ to describe the skin of a woman’s breast use a racial slur to describe another woman’s labia in the same book? Some cruelty in him moves to the forefront, as well as a burgeoning distaste for the politics of the counterculture whose sexual advances made it possible for him to write in extended milky detail about swingers breastfeeding one another in the bathroom.
by Patricia Lockwood, LRB | Read more:
Image: Joanne Rathe/The Boston Globe[ed. 911? Hello. I'd like to report a murder. What an essay/retrospective by Ms Lockwood! This is how you do it.]
Abandoning a Cat
Of course I have a lot of memories of my father. It’s only natural, considering that we lived under the same roof of our not exactly spacious home from the time I was born until I left home at eighteen. And, as is the case with most children and parents, I imagine, some of my memories of my father are happy, some not quite so much. But the memories that remain most vividly in my mind now fall into neither category; they involve more ordinary events.
This one, for instance:
When we were living in Shukugawa (part of Nishinomiya City, in Hyogo Prefecture), one day we went to the beach to get rid of a cat. Not a kitten but an older female cat. Why we needed to get rid of it I can’t recall. The house we lived in was a single-family home with a garden and plenty of room for a cat. Maybe it was a stray we’d taken in that was now pregnant, and my parents felt they couldn’t care for it anymore. My memory isn’t clear on this point. Getting rid of cats back then was a common occurrence, not something that anyone would criticize you for. The idea of neutering cats never crossed anyone’s mind. I was in one of the lower grades in elementary school at the time, I believe, so it was probably around 1955, or a little later. Near our home were the ruins of a bank building that had been bombed by American planes—one of a few still visible scars of the war.
My father and I set off that summer afternoon to leave the cat by the shore. He pedalled his bicycle, while I sat on the back holding a box with the cat inside. We rode along the Shukugawa River, arrived at the beach at Koroen, set the box down among some trees there, and, without a backward glance, headed home. The beach must have been about two kilometres from our house.
At home, we got off the bike—discussing how we felt sorry for the cat, but what could we do?—and when we opened the front door the cat we’d just abandoned was there, greeting us with a friendly meow, its tail standing tall. It had beaten us home. For the life of me, I couldn’t figure out how it had done that. We’d been on a bike, after all. My father was stumped as well. The two of us stood there for a while, at a total loss for words. Slowly, my father’s look of blank amazement changed to one of admiration and, finally, to an expression of relief. And the cat went back to being our pet.
We always had cats at home, and we liked them. I didn’t have any brothers or sisters, and cats and books were my best friends when I was growing up. I loved to sit on the veranda with a cat, sunning myself. So why did we have to take that cat to the beach and abandon it? Why didn’t I protest? These questions—along with that of how the cat beat us home—are still unanswered. (...)
I recall now the expression on my father’s face—surprised at first, then impressed, then relieved—when that cat we had supposedly abandoned beat us home.
I’ve never experienced anything like that. I was brought up—fairly lovingly, I’d say—as the only child in an ordinary family. So I can’t understand, on a practical or an emotional level, what kind of psychic scars may result when a child is abandoned by his parents. I can only imagine it on a superficial level.
The French director François Truffaut talked about being forced to live apart from his parents when he was young. And for the rest of his life he pursued this theme of abandonment in his films. Most people probably have some depressing experience they can’t quite put into words but also can’t forget.
My father graduated from Higashiyama Junior High School (equivalent to a high school today) in 1936 and entered the School for Seizan Studies at eighteen. Students generally received a four-year exemption from military service, but he forgot to take care of some administrative paperwork, and in 1938, when he was twenty, he was drafted. It was a procedural error, but once that kind of mistake is made you can’t just apologize your way out of it. Bureaucracies and the military are like that. Protocol has to be followed.
This one, for instance:
When we were living in Shukugawa (part of Nishinomiya City, in Hyogo Prefecture), one day we went to the beach to get rid of a cat. Not a kitten but an older female cat. Why we needed to get rid of it I can’t recall. The house we lived in was a single-family home with a garden and plenty of room for a cat. Maybe it was a stray we’d taken in that was now pregnant, and my parents felt they couldn’t care for it anymore. My memory isn’t clear on this point. Getting rid of cats back then was a common occurrence, not something that anyone would criticize you for. The idea of neutering cats never crossed anyone’s mind. I was in one of the lower grades in elementary school at the time, I believe, so it was probably around 1955, or a little later. Near our home were the ruins of a bank building that had been bombed by American planes—one of a few still visible scars of the war.
My father and I set off that summer afternoon to leave the cat by the shore. He pedalled his bicycle, while I sat on the back holding a box with the cat inside. We rode along the Shukugawa River, arrived at the beach at Koroen, set the box down among some trees there, and, without a backward glance, headed home. The beach must have been about two kilometres from our house.At home, we got off the bike—discussing how we felt sorry for the cat, but what could we do?—and when we opened the front door the cat we’d just abandoned was there, greeting us with a friendly meow, its tail standing tall. It had beaten us home. For the life of me, I couldn’t figure out how it had done that. We’d been on a bike, after all. My father was stumped as well. The two of us stood there for a while, at a total loss for words. Slowly, my father’s look of blank amazement changed to one of admiration and, finally, to an expression of relief. And the cat went back to being our pet.
We always had cats at home, and we liked them. I didn’t have any brothers or sisters, and cats and books were my best friends when I was growing up. I loved to sit on the veranda with a cat, sunning myself. So why did we have to take that cat to the beach and abandon it? Why didn’t I protest? These questions—along with that of how the cat beat us home—are still unanswered. (...)
I recall now the expression on my father’s face—surprised at first, then impressed, then relieved—when that cat we had supposedly abandoned beat us home.
I’ve never experienced anything like that. I was brought up—fairly lovingly, I’d say—as the only child in an ordinary family. So I can’t understand, on a practical or an emotional level, what kind of psychic scars may result when a child is abandoned by his parents. I can only imagine it on a superficial level.
The French director François Truffaut talked about being forced to live apart from his parents when he was young. And for the rest of his life he pursued this theme of abandonment in his films. Most people probably have some depressing experience they can’t quite put into words but also can’t forget.
My father graduated from Higashiyama Junior High School (equivalent to a high school today) in 1936 and entered the School for Seizan Studies at eighteen. Students generally received a four-year exemption from military service, but he forgot to take care of some administrative paperwork, and in 1938, when he was twenty, he was drafted. It was a procedural error, but once that kind of mistake is made you can’t just apologize your way out of it. Bureaucracies and the military are like that. Protocol has to be followed.
by Haruki Murakami, New Yorker | Read more:
Image: Emiliano Ponzi
Thursday, October 3, 2019
Wednesday, October 2, 2019
How Bill Clinton and American Financiers Armed China
It’s the 70th anniversary of the People’s Republic of China, which Xi Jinping is celebrating with aggressive rhetoric and a militaristic display of his ICBMs that can strike at the U.S. in 30 minutes. So today I’m going to write about how American aerospace monopolists, dumb Pentagon procurement choices, and the Bill Clinton administration helped create the Chinese missile threat we are now confronting.
In August of 1994, Bill Clinton’s Secretary of Commerce, Ron Brown, flew to China to try and seal two deals for American corporations. The first was to enable Chrysler the ability to build minivans in China, and the second was to get the Chinese to buy 40 MD-90 aircraft ‘Trunkliners” from McDonnell Douglas.
The McConnell Douglas deal was particularly important to the Clinton administration for a number of reasons. The company was dying; it was badly run by financiers who lacked an appreciation for quality production. More importantly, it had lost a key military contract for the F-22 in 1986, so the government felt an obligation to find customers to prop it up. There was also politics, with Bill Clinton trying to honor his unofficial 1992 campaign slogan, “it’s the economy, stupid.” Clinton would indeed hail the deal on the eve of the 1994 midterm election.
The Chinese agreed to buy the planes, but with one caveat. They wanted a side deal; McDonnell Douglas should sell a mysterious company called the China National Aero Technology Import and Export Corporation (CATIC) a set of specialist machine tools that shape and bend aircraft parts stashed in a factory in Columbus, Ohio.
When Chinese representatives went to Columbus, Ohio, workers wouldn’t let them see the tools, because workers realized that they would lose their jobs if the tools were sold to the Chinese. The Chinese then sent a letter to the corporation saying that the deal for the Trunkliners was at a stalemate, but if the machine tools were sold to a mysterious Chinese company, well, that would have a “big influence” on whether McDonnell Douglas could close the deal on the planes.
It wasn’t just the workers who caused problems. The government could have been a hurdle for McDonnell Douglas as well, because these weren’t just any old machine tools. “According to military experts,” reported the New York Times, “the machines would enable the Chinese military to improve significantly the performance abilities -- speed, range and maneuverability -- of their aircraft. And if diverted, they could do the same for missiles and bombers.” Selling the tools wasn’t just a commercial deal, the machining equipment was subject to export controls for sensitive national security technology.
It was an insane idea, selling the Chinese government this important machining capacity. The Pentagon protested vehemently, as did Republican Congressman Tillie Fowler, who was on the Armed Services Committee. Fowler said allowing the transfer to reflects an ''emphasis on short-term gain at the expense of national security and long-term economic gain.'' And yet that’s what McDonnell Douglas sought, and what the Clinton administration pushed through. The Commerce Department cleared the deal, in return for a pledge (or behavioral remedy) that China would not use the tools to build missiles, but would dedicate them to a civilian aircraft machine tool center in Beijing.
McDonnell Douglas basically knew the behavioral remedies were fraudulent almost immediately; one of the most important pieces of equipment was shipped not to Beijing but directly to a Nanchang military plant. It wasn’t just McDonnell Douglas who understood the con; Clinton officials had the details of the deal, and let it go through anyway. Why? They used the same excuses we hear today - competitiveness and a fear of offending China. Here’s the NYT explaining what happened.
Still, this was too little too late. The episode was by any metric catastrophic; the Chinese government got missile making machine tools in return for a promise they didn’t honor, which should have been a massive scandal, borderline treason. But ultimately it wasn’t a scandal, because Republicans, leading globalization thinkers, and Clinton Democrats decided that transferring missile technology to China didn’t matter.
Remember, during this entire period, Bill Clinton pressed aggressively to open up the U.S. industrial base to Chinese offshoring. And towards the end of the Clinton administration, McDonnell Douglas, as we all now know, later merged with Boeing, and that merger ended up destroying the capacity of Boeing - by then the sole American large civilian aircraft maker - to manufacture safe civilian planes.
How Bill Clinton Made the Worst Strategic Decisions in American History
Chinese power today is a result of a large number of incidents similar to this one, the wholesale transfer of knowhow, technology, and physical stuff from American communities to Chinese ones. And the confused politics of China is a result of the failure of the many policymaking elites who participated in such rancid episodes, and are embarrassed about it. As we peer at an ascendant and dangerous China, it makes sense to look back at how Clinton thought about the world, and why he would engage in such a foolish strategy.
Broadly speaking, there were two catastrophic decisions Clinton made in 1993 that ended up eroding the long-term American defense posture. The first was to radically break from the post-World War II trading system. This system was organized around free trade of goods and services among democratic nations, along with somewhat restricted financial capital flows. He did this by passing NAFTA, by bailing out Mexico and thus American banks, by creating the World Trade Organization, and by opening up the United States to China as deep commercial partners.
The Clinton framework gutted the ability of U.S. policymakers to protect industrial power, and empowered Wall Street and foreign officials to force the U.S. to export its industrial base abroad, in particular to China. The radicalism of the choice was in the intertwining of the U.S. industrial base with an autocratic strategic competitor. During the Cold War, we had never relied on the USSR for key inputs, and basically didn’t trade with them. Now, we would deeply integrate our technology and manufacturing with an enemy (and yes, the Chinese leaders saw and currently still see us as enemies).
The second choice was to reorganize the American defense industrial base, ripping out contracting rules and consolidating power into the hands of a small group of defense giants. In the early 1990s, as part of the ‘reinventing government’ initiative, the Clinton team sought to radically empower private contractors in the government procurement process. This new philosophy was most significant when it hit the military, a process led by William Perry.
The empowering of finance friendly giant contractors bent the bureaucracies towards only seeing global capital flows, not the flow of stuff or the ability to produce. This was already how most Clinton administration officials saw the world. They just assumed, wrongly, that stuff moves around the world without friction, and that American corporations operate in a magic fairy tale where practical problems are solved by finance and this thing called ‘the free market.’ In their Goldman, McKinsey and Boston Consulting Group-ified haze of elitist disdain for actually making and doing real things, they didn’t notice or care that the Chinese Communist Party was centralizing production in China. They just assumed that Chinese production was ‘the free market’ at work, instead of a carefully state-sponsored effort by Chinese bureaucrats to build strategic military and economic power.
Part of this myopia was straightforward racism, an inability to imagine that a non-white country could topple Western power. Part of it was greed, as Chinese money poured into the coffers of Bush-era and Clinton-era officials, as well as private equity barons. This spigot of cash continued through the Bush and Obama administrations.
In August of 1994, Bill Clinton’s Secretary of Commerce, Ron Brown, flew to China to try and seal two deals for American corporations. The first was to enable Chrysler the ability to build minivans in China, and the second was to get the Chinese to buy 40 MD-90 aircraft ‘Trunkliners” from McDonnell Douglas.
The McConnell Douglas deal was particularly important to the Clinton administration for a number of reasons. The company was dying; it was badly run by financiers who lacked an appreciation for quality production. More importantly, it had lost a key military contract for the F-22 in 1986, so the government felt an obligation to find customers to prop it up. There was also politics, with Bill Clinton trying to honor his unofficial 1992 campaign slogan, “it’s the economy, stupid.” Clinton would indeed hail the deal on the eve of the 1994 midterm election.
The Chinese agreed to buy the planes, but with one caveat. They wanted a side deal; McDonnell Douglas should sell a mysterious company called the China National Aero Technology Import and Export Corporation (CATIC) a set of specialist machine tools that shape and bend aircraft parts stashed in a factory in Columbus, Ohio.When Chinese representatives went to Columbus, Ohio, workers wouldn’t let them see the tools, because workers realized that they would lose their jobs if the tools were sold to the Chinese. The Chinese then sent a letter to the corporation saying that the deal for the Trunkliners was at a stalemate, but if the machine tools were sold to a mysterious Chinese company, well, that would have a “big influence” on whether McDonnell Douglas could close the deal on the planes.
It wasn’t just the workers who caused problems. The government could have been a hurdle for McDonnell Douglas as well, because these weren’t just any old machine tools. “According to military experts,” reported the New York Times, “the machines would enable the Chinese military to improve significantly the performance abilities -- speed, range and maneuverability -- of their aircraft. And if diverted, they could do the same for missiles and bombers.” Selling the tools wasn’t just a commercial deal, the machining equipment was subject to export controls for sensitive national security technology.
It was an insane idea, selling the Chinese government this important machining capacity. The Pentagon protested vehemently, as did Republican Congressman Tillie Fowler, who was on the Armed Services Committee. Fowler said allowing the transfer to reflects an ''emphasis on short-term gain at the expense of national security and long-term economic gain.'' And yet that’s what McDonnell Douglas sought, and what the Clinton administration pushed through. The Commerce Department cleared the deal, in return for a pledge (or behavioral remedy) that China would not use the tools to build missiles, but would dedicate them to a civilian aircraft machine tool center in Beijing.
McDonnell Douglas basically knew the behavioral remedies were fraudulent almost immediately; one of the most important pieces of equipment was shipped not to Beijing but directly to a Nanchang military plant. It wasn’t just McDonnell Douglas who understood the con; Clinton officials had the details of the deal, and let it go through anyway. Why? They used the same excuses we hear today - competitiveness and a fear of offending China. Here’s the NYT explaining what happened.
“American officials want to avoid sending any signals that would fuel China's belief that the United States is trying to ''contain'' China's power, militarily or economically. And they know that if they deny a range of industrial technology to China, other competitors -- chiefly France and Germany -- are ready to leap in and fill the void.”China never honored the overall deal. By 1999, China had acquired only one of the 20 promised Trunkliner airplanes. And three years later, the Federal government indicted McDonnell Douglas for “conspiracy, false statements and misrepresentations in connection with a 1994 export license to sell 13 pieces of machining equipment to China.” The government also went after the Chinese company.
Still, this was too little too late. The episode was by any metric catastrophic; the Chinese government got missile making machine tools in return for a promise they didn’t honor, which should have been a massive scandal, borderline treason. But ultimately it wasn’t a scandal, because Republicans, leading globalization thinkers, and Clinton Democrats decided that transferring missile technology to China didn’t matter.
Remember, during this entire period, Bill Clinton pressed aggressively to open up the U.S. industrial base to Chinese offshoring. And towards the end of the Clinton administration, McDonnell Douglas, as we all now know, later merged with Boeing, and that merger ended up destroying the capacity of Boeing - by then the sole American large civilian aircraft maker - to manufacture safe civilian planes.
How Bill Clinton Made the Worst Strategic Decisions in American History
Chinese power today is a result of a large number of incidents similar to this one, the wholesale transfer of knowhow, technology, and physical stuff from American communities to Chinese ones. And the confused politics of China is a result of the failure of the many policymaking elites who participated in such rancid episodes, and are embarrassed about it. As we peer at an ascendant and dangerous China, it makes sense to look back at how Clinton thought about the world, and why he would engage in such a foolish strategy.
Broadly speaking, there were two catastrophic decisions Clinton made in 1993 that ended up eroding the long-term American defense posture. The first was to radically break from the post-World War II trading system. This system was organized around free trade of goods and services among democratic nations, along with somewhat restricted financial capital flows. He did this by passing NAFTA, by bailing out Mexico and thus American banks, by creating the World Trade Organization, and by opening up the United States to China as deep commercial partners.
The Clinton framework gutted the ability of U.S. policymakers to protect industrial power, and empowered Wall Street and foreign officials to force the U.S. to export its industrial base abroad, in particular to China. The radicalism of the choice was in the intertwining of the U.S. industrial base with an autocratic strategic competitor. During the Cold War, we had never relied on the USSR for key inputs, and basically didn’t trade with them. Now, we would deeply integrate our technology and manufacturing with an enemy (and yes, the Chinese leaders saw and currently still see us as enemies).
The second choice was to reorganize the American defense industrial base, ripping out contracting rules and consolidating power into the hands of a small group of defense giants. In the early 1990s, as part of the ‘reinventing government’ initiative, the Clinton team sought to radically empower private contractors in the government procurement process. This new philosophy was most significant when it hit the military, a process led by William Perry.
In 1993, Defense Department official William Perry gathered CEOs of top defense contractors and told them that they would have to merge into larger entities because of reduced Cold War spending. “Consolidate or evaporate,” he said at what became known as “The Last Supper” in military lore. Former secretary of the Navy John Lehman noted, “industry leaders took the warning to heart.” They reduced the number of prime contractors from 16 to six; subcontractor mergers quadrupled from 1990 to 1998. They also loosened rules on sole source—i.e. monopoly—contracts, and slashed the Defense Logistics Agency, resulting in thousands of employees with deep knowledge of defense contracting leaving the public sector.Perry was a former merger specialist who fetishized expensive technology in weapons systems. But what Perry was doing was part of an overall political deal. In the 1980s, the Reagan administration radically raised defense spending. Democrats went along with the spending boost, on condition that they get to write the contracting rules. So while the Reagan build-up was big and corrupt, it was not unusually corrupt. When Clinton came into office, his team asked defense contractor how to make them happy in an environment of stagnant or reduced defense spending. The answer was simple. Raise their margins. The merger wave and sole source contracting was the result.
The empowering of finance friendly giant contractors bent the bureaucracies towards only seeing global capital flows, not the flow of stuff or the ability to produce. This was already how most Clinton administration officials saw the world. They just assumed, wrongly, that stuff moves around the world without friction, and that American corporations operate in a magic fairy tale where practical problems are solved by finance and this thing called ‘the free market.’ In their Goldman, McKinsey and Boston Consulting Group-ified haze of elitist disdain for actually making and doing real things, they didn’t notice or care that the Chinese Communist Party was centralizing production in China. They just assumed that Chinese production was ‘the free market’ at work, instead of a carefully state-sponsored effort by Chinese bureaucrats to build strategic military and economic power.
Part of this myopia was straightforward racism, an inability to imagine that a non-white country could topple Western power. Part of it was greed, as Chinese money poured into the coffers of Bush-era and Clinton-era officials, as well as private equity barons. This spigot of cash continued through the Bush and Obama administrations.
by Matt Stoller, BIG | Read more:
Image: uncredited
Beachheads and Obstacles
Apple and Google may be the first companies people think of when you ask who won mobile, but Amazon and Facebook were not far behind.
Amazon spent the smartphone era not only building out Amazon.com, but also Amazon Web Services (AWS). AWS was just as much a critical platform for the smartphone revolution as were iOS and Android: many apps ran on the phone with data or compute on Amazon’s cloud; mobile also created a vacuum in the enterprise for SaaS companies eager to take advantage of Microsoft’s desire to prop up its own mobile platforms instead of supporting iOS and Android, and those SaaS companies were built on AWS.
Smartphones, meanwhile, saved Facebook from itself: instead of a futile attempt to be a platform within the browser, mobile made Facebook just an app, and it was the best possible thing that could have happened to the company. Facebook was freed to focus solely on content its users wanted and advertising to go along with it, generating billions of dollars and a deep moat in targeting advertising along the way.
What is not clear is if Amazon’s and Facebook’s management teams agree. After all, both launched smartphones of their own, and both failed spectacularly.
Facebook’s attempt was rather half-assed (to use the technical term). Instead of writing their own operating system, Facebook Home was a launcher that sat on top of Android; instead of designing their own hardware, the Facebook One was built by HTC. Both decisions ended up being good ones because they made failure less expensive.
Amazon, meanwhile, went all out to build the Fire Phone: a new operating system (based on Android, but incompatible with it), new hardware, including a complicated camera system that included four front-facing cameras, and a sky-high price to match. It fared about as well as the Facebook One, which is to say not well at all.
That, though, is what made last week’s events so interesting: it is these two failures that seemed to play a bigger role in what was announced than did the successes.
Amazon and Facebook’s Announcements
Start with Amazon: the company announced a full fifteen hardware products. In order: Echo Dot with Clock, a new Echo, Echo Studio (an Echo with a high-end speaker system), Echo Show 8 (a third-size of the Echo with a screen), Echo Glow (a lamp), new Eero routers, Echo Flex (a microphone only Echo that hangs off an outlet), Ring Retrofit Alarm Kit (that lets you leverage your preinstalled alarm), Ring Stick Up Cam (a smaller Ring camera), Ring Indoor Cam (an even smaller Ring camera), Amazon Smart Oven (an oven that integrates with Alexa), Fetch (a pet tracker), Echo Buds (wireless headphones with Alexa), Echo Frames (eyeglasses with Alexa), and Echo Loop (a ring with Alexa). Whew!
This is an approach that is the exact opposite of the Fire Phone: instead of pouring all of its resources into one high-priced device, Amazon is making just about every device it can think of, and seeing if they sell. Moreover, they are doing so at prices that significantly undercut the competition: the Echo Studio is $150 cheaper than a HomePod, the Echo Show 8 is $60 cheaper than the Google Nest Hub, and the new Eero is $150 cheaper than the product Eero sold as an independent company. Amazon is clearly pushing for ubiquity; a whale strategy this is not.
Facebook, meanwhile, effectively consolidated its Oculus product line from three to one: the mid-tier Oculus Quest, a standalone virtual reality (VR) unit, gained the capability to connect to a gaming PC in order to play high-end Oculus Rift games; Oculus Go apps, meanwhile, gained the capability to run on the relatively higher-specced Oculus Quest. It is not clear why either the Go or Rift should be a target for developers or customers going forward.
The broader goal, though, remains the same: Facebook is determined to own a platform; the lesson the company seems to have drawn from its smartphone experience is the importance of doing it all.
Beachheads and Obstacles
What Amazon and Facebook do have in common — and perhaps this is why both seem to look back at their very successful smartphone eras with regret — is that Apple and Google are their biggest obstacles to success, and it’s because of their smartphone platforms.
Amazon to its great credit — and perhaps because the company did not have a smartphone to rely on — found a beachhead in the home, the one place where your phone may not be with you. Now it is trying to not only saturate the home but also extend beyond it, both through on-body accessories and also an expanding number of deals with automakers.
Facebook, meanwhile, is searching for a beachhead of its own in virtual reality. That, the company believes, will give it the track to augmented reality, and by extension, usefulness in the real world.
Amazon’s challenge is Google: Android phones are already everywhere, and Google is catching up in the home more quickly and more effectively than Amazon is pushing outside of it. Google also has a much stronger position when it comes to the sort of Internet services that provide the rough grist of intelligence of virtual assistants: emails, calendars, and maps.
Facebook, meanwhile, is ultimately challenging Apple: augmented reality is going to start at the high end with an integrated solution, and Apple has considerably more experience building physical products for the real world, and a major lead in chip design and miniaturization, not to mention consumer trust. Moreover, while there is obviously technical overlap when it comes to creating virtual reality and augmented reality headsets, the product experience is fundamentally distinct.
Amazon spent the smartphone era not only building out Amazon.com, but also Amazon Web Services (AWS). AWS was just as much a critical platform for the smartphone revolution as were iOS and Android: many apps ran on the phone with data or compute on Amazon’s cloud; mobile also created a vacuum in the enterprise for SaaS companies eager to take advantage of Microsoft’s desire to prop up its own mobile platforms instead of supporting iOS and Android, and those SaaS companies were built on AWS.
Smartphones, meanwhile, saved Facebook from itself: instead of a futile attempt to be a platform within the browser, mobile made Facebook just an app, and it was the best possible thing that could have happened to the company. Facebook was freed to focus solely on content its users wanted and advertising to go along with it, generating billions of dollars and a deep moat in targeting advertising along the way.What is not clear is if Amazon’s and Facebook’s management teams agree. After all, both launched smartphones of their own, and both failed spectacularly.
Facebook’s attempt was rather half-assed (to use the technical term). Instead of writing their own operating system, Facebook Home was a launcher that sat on top of Android; instead of designing their own hardware, the Facebook One was built by HTC. Both decisions ended up being good ones because they made failure less expensive.
Amazon, meanwhile, went all out to build the Fire Phone: a new operating system (based on Android, but incompatible with it), new hardware, including a complicated camera system that included four front-facing cameras, and a sky-high price to match. It fared about as well as the Facebook One, which is to say not well at all.
That, though, is what made last week’s events so interesting: it is these two failures that seemed to play a bigger role in what was announced than did the successes.
Amazon and Facebook’s Announcements
Start with Amazon: the company announced a full fifteen hardware products. In order: Echo Dot with Clock, a new Echo, Echo Studio (an Echo with a high-end speaker system), Echo Show 8 (a third-size of the Echo with a screen), Echo Glow (a lamp), new Eero routers, Echo Flex (a microphone only Echo that hangs off an outlet), Ring Retrofit Alarm Kit (that lets you leverage your preinstalled alarm), Ring Stick Up Cam (a smaller Ring camera), Ring Indoor Cam (an even smaller Ring camera), Amazon Smart Oven (an oven that integrates with Alexa), Fetch (a pet tracker), Echo Buds (wireless headphones with Alexa), Echo Frames (eyeglasses with Alexa), and Echo Loop (a ring with Alexa). Whew!
This is an approach that is the exact opposite of the Fire Phone: instead of pouring all of its resources into one high-priced device, Amazon is making just about every device it can think of, and seeing if they sell. Moreover, they are doing so at prices that significantly undercut the competition: the Echo Studio is $150 cheaper than a HomePod, the Echo Show 8 is $60 cheaper than the Google Nest Hub, and the new Eero is $150 cheaper than the product Eero sold as an independent company. Amazon is clearly pushing for ubiquity; a whale strategy this is not.
Facebook, meanwhile, effectively consolidated its Oculus product line from three to one: the mid-tier Oculus Quest, a standalone virtual reality (VR) unit, gained the capability to connect to a gaming PC in order to play high-end Oculus Rift games; Oculus Go apps, meanwhile, gained the capability to run on the relatively higher-specced Oculus Quest. It is not clear why either the Go or Rift should be a target for developers or customers going forward.
The broader goal, though, remains the same: Facebook is determined to own a platform; the lesson the company seems to have drawn from its smartphone experience is the importance of doing it all.
Beachheads and Obstacles
What Amazon and Facebook do have in common — and perhaps this is why both seem to look back at their very successful smartphone eras with regret — is that Apple and Google are their biggest obstacles to success, and it’s because of their smartphone platforms.
Amazon to its great credit — and perhaps because the company did not have a smartphone to rely on — found a beachhead in the home, the one place where your phone may not be with you. Now it is trying to not only saturate the home but also extend beyond it, both through on-body accessories and also an expanding number of deals with automakers.
Facebook, meanwhile, is searching for a beachhead of its own in virtual reality. That, the company believes, will give it the track to augmented reality, and by extension, usefulness in the real world.
Amazon’s challenge is Google: Android phones are already everywhere, and Google is catching up in the home more quickly and more effectively than Amazon is pushing outside of it. Google also has a much stronger position when it comes to the sort of Internet services that provide the rough grist of intelligence of virtual assistants: emails, calendars, and maps.
Facebook, meanwhile, is ultimately challenging Apple: augmented reality is going to start at the high end with an integrated solution, and Apple has considerably more experience building physical products for the real world, and a major lead in chip design and miniaturization, not to mention consumer trust. Moreover, while there is obviously technical overlap when it comes to creating virtual reality and augmented reality headsets, the product experience is fundamentally distinct.
by Ben Thompson, Stratechery | Read more:
Image: uncredited
How to Set Your Google Data to Self-Destruct
Last year you may have been addicted to Beyoncé. But nowadays you’re more into Lizzo. You also once went through a phase of being obsessed with houseplants, but have lately gotten into collecting ballpoint pens.
People’s tastes and interests change. So why should our Google data histories be eternal?
For years, Google has kept a record of our internet searches by default. The company hoards that data so it can build detailed profiles on us, which helps it make personalized recommendations for content but also lets marketers better target us with ads. While there have been tools we can use to manually purge our Google search histories, few of us remember to do so.
So I’m recommending that we all try Google’s new privacy tools. In May, the company introduced an option that lets us automatically delete data related to our Google searches, requests made with its virtual assistant and our location history.
On Wednesday, Google followed up by expanding the auto-delete ability to YouTube. In the coming weeks, it will begin rolling out a new private mode for when you’re navigating to a destination with its Google Maps app, which could come in handy if you’re going somewhere you want to keep secret, like a therapist’s office.
“All of this work is in service of having a great user experience,” Eric Miraglia, Google’s data protection officer, said about the new privacy features. “Part of that experience is, how does the user feel about the control they have?”
How do we best use Google’s new privacy tools? The company gave me a demonstration of the newest controls this week, and I tested the tools that it released earlier this year. Here’s what to know about them.
People’s tastes and interests change. So why should our Google data histories be eternal?
For years, Google has kept a record of our internet searches by default. The company hoards that data so it can build detailed profiles on us, which helps it make personalized recommendations for content but also lets marketers better target us with ads. While there have been tools we can use to manually purge our Google search histories, few of us remember to do so.
So I’m recommending that we all try Google’s new privacy tools. In May, the company introduced an option that lets us automatically delete data related to our Google searches, requests made with its virtual assistant and our location history.On Wednesday, Google followed up by expanding the auto-delete ability to YouTube. In the coming weeks, it will begin rolling out a new private mode for when you’re navigating to a destination with its Google Maps app, which could come in handy if you’re going somewhere you want to keep secret, like a therapist’s office.
“All of this work is in service of having a great user experience,” Eric Miraglia, Google’s data protection officer, said about the new privacy features. “Part of that experience is, how does the user feel about the control they have?”
How do we best use Google’s new privacy tools? The company gave me a demonstration of the newest controls this week, and I tested the tools that it released earlier this year. Here’s what to know about them.
Brian X. Chen, NY Times | Read more:
Image: Glenn Harvey
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